Charlottesville Attorney: Short Sales, Settlements & More

Tip 4-2012: Fannie Mae (Short Sales vs. Foreclosures - Part 1)

2012-01-26T15:10:00.002-05:00

Fannie Mae: Short Sales vs. Foreclosures—Part 1

Fannie Mae as an investor owns more and more troubled loans. As the investor, Fannie Mae is “calling the shots” whether a property can be sold as a short sale or is going to foreclosure. Their public policy statement on their website states Fannie Mae is “helping families prevent foreclosures,” but recent practices in the short sale arena result in the opposite. In other words, Fannie Mae’s actual practices and guidelines submitted to their loan servicers are resulting in more foreclosures.

Here are some recent trends observed with Fannie Mae:

1. Fannie Mae loans are being foreclosed on much sooner than other conventional and government loans. (For example, in the last several months, we are aware of two foreclosures in our local market where the Borrower was only four months behind.) Most Lenders allow a much longer delinquency period before a foreclosure.

2. Once a foreclosure is started it is practically impossible to postpone due to recent Fannie Mae Guidelines (which according to various loan servicers appear to be in conflict):

A. A ratified contract has to be submitted to the Short Sale Lender prior to thirty days before a scheduled foreclosure, or

B. The completed Short Sale Package has to be submitted to Fannie Mae within ten days prior to the scheduled foreclosure date, or

C. Fannie Mae has to approve the short sale within ten days (or according to another negotiator within three business days) of the scheduled foreclosure.

Most Lenders will postpone a foreclosure to allow sufficient time to review the short sale contract.

If these trends or guidelines continue, Fannie Mae borrowers are in for a rough time with trying to short sale their underwater properties. Please look for Part 2 next week.

Please call or email me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.

William D. Tucker, III, Sr. Partner

Tucker Griffin Barnes P.C.

TGBLaw.com | Facebook | Twitter | YouTube

Where deep insight equals powerful advantage!

Charlottesville 434-973-7474 | Lake Monticello 434-589-3636

Tip 3-2012: Short Sales - Local Trends

2012-01-24T14:52:00.002-05:00

(Short Sales—Local Trends) Here are some interesting observations about short sales in our local market:

1. There are considerably more homeowners wanting to discuss possible short sale listings and contracts. (We are now averaging between 20 to 30 new callers per month.)

2. Unreasonably high BPO’s (Broker Price Opinion) will cause short sale contracts to be either significantly renegotiated or terminated. (Hopefully more BPOs will be prepared by local realtors who have a realistic idea of our current market values.)

3. Once there is a short sale contract with a reasonable BPO, the short sale lenders are allowing the short sale to be completed successfully. Our experience from 2011 showed an 88% success rate once there was a short sale contract (The small percentage that were foreclosed on occurred because of a high BPO or questionable short sale lender guidelines.)

The take away — (a) there is a lot of short sale demand in our market, and (b) the short sale lenders are working hard (although not very fast) to approve the sales.

Please call or email me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.

William D. Tucker, III, Sr. Partner

Tucker Griffin Barnes P.C.

TGBLaw.com | Facebook | Twitter | YouTube

Where deep insight equals powerful advantage!

Charlottesville 434-973-7474 | Lake Monticello 434-589-3636

Tip 2-2012: More Holidays

2012-01-13T10:49:00.000-05:00

(More Holidays!!) Once again the Clerk’s Offices will be closed for a long four day weekend. On Friday, January 13, 2012, the Clerk’s Offices will be closed for Lee-Jackson Day. Then on Monday, January 16, they will be closed again for Martin Luther King Jr. Day. (All the Banks and government offices will be closed on Martin Luther King Jr. Day, while Lee-Jackson Day is still a work day for most everyone, except the Clerk’s Offices.)

Accordingly, recordings need to be completed by Thursday, January 12, 2012 or they will have to wait until Tuesday, January 17 to be recorded. After these Holidays, the Clerk’s Offices will be open for the normal five day week (unless of course there are “snow days” to shorten the week.)

Please call me at 434-951-0858 if you have questions.

William D. Tucker, III, Sr. Partner

Tucker Griffin Barnes P.C.

TGBLaw.com | Facebook | Twitter | YouTube

Where deep insight equals powerful advantage!

Charlottesville 434-973-7474 | Lake Monticello 434-589-3636

Tip 1-2012: Quicker Foreclosures?

2012-01-13T10:45:00.000-05:00

(Quicker Foreclosures?) There are no rules as to “how soon” a bank will start foreclosing after someone becomes delinquent with their mortgage payments. The only requirements are that the delinquent homeowner receives a written thirty day notice of default, and that the foreclosure advertisements appear in a local newspaper as required by the Deed of Trust. Each lender seems to have its own guidelines (usually based on the investor’s instructions) as to when the foreclosure process will start. (PS—These guidelines seem to keep changing!)

The normal time frame (if anything could be described as normal) appears to be at least five months, but usually longer, before the foreclosure will start. Recently, however, there has been some lenders who have foreclosed after the Borrower is only four months delinquent.

Additionally, the lenders normally will postpone the foreclosure to allow time to consider a loan modification, or more likely, a short sale. Although these postponements still occur, there have recently been occasions where due to “investor guidelines,” the foreclosing bank will not postpone the foreclosure to consider a short sale contract. Hopefully these two observations (foreclosing after only four months delinquent and not postponing a foreclosure to review a short sale contract) are just abnormalities.

No one needs more foreclosures in their market place. Lenders should be allowing the delinquent Borrowers to obtain a true loan modification and keep their house. As this is just not going to happen, then they must allow sufficient time to review a short sale contract and not just foreclose because the guidelines require it. We all lose with a foreclosure!

Please call me at 434-951-0858 if you have questions, or visit our real estate archive for all previous tips.

William D. Tucker, III, Sr. Partner

Tucker Griffin Barnes P.C.

TGBLaw.com | Facebook | Twitter | YouTube

Where deep insight equals powerful advantage!

Charlottesville 434-973-7474 | Lake Monticello 434-589-3636

Tip 53-2011: New Years

2011-12-28T15:55:00.002-05:00

(New Years)

Tag: Real Estate Attorney

Hopefully everyone had a wonderful Christmas Holiday weekend. Remember Tucker’s Tips is still taking a vacation this week for New Years.

(Reminder: The Clerk’s Offices for Charlottesville and Albemarle will be closed Friday, December 30, but the other surrounding Clerk’s Offices will be open on Friday. All of the Clerk’s Offices will be closed Monday, January 2, 2012.)

It’s hard to believe another year has gone by. All of us at Tucker Griffin Barnes hope 2011 was a good year for you, and that 2012 will be even better. Stay safe and warm. Don’t drink and drive, and “Have A Happy New Year!”

William D. Tucker, III, Sr. Partner

Tucker Griffin Barnes P.C.

TGBLaw.com | Facebook | Twitter | YouTube

Where Deep Insight Equals Powerful Advantage!

Charlottesville 434-973-7474 | Lake Monticello 434-589-3636

Tip 52-2001: Holiday Vacation

2011-12-28T15:52:00.005-05:00

(Holiday Vacation)

Tag: Real Estate Attorney

Tucker’s Tips is taking a vacation this week (Christmas Week) and next (New Year’s Week.) Hopefully all real estate professionals who receive this email are preparing to spend time with their families and loved ones during this Holiday Season.

This is a great time to remember why we are thankful for all those people who enrich each of our lives. Remember to tell them why they are so important to you (Gifts are fine, but telling someone that you love them, and why they are important to you can not be duplicated.) And don’t forget — “A Hug a Day Keeps the Doctor Away.”

Merry Christmas and Happy Chanukah! Have a Safe and Joyous Holiday!

William D. Tucker, III, Sr. Partner

Tucker Griffin Barnes P.C.

TGBLaw.com | Facebook | Twitter | YouTube

Where deep insight equals powerful advantage!

Charlottesville 434-973-7474 | Lake Monticello 434-589-3636

Tip 51-2011: Clerk's Office Schedule for the Holidays

2011-12-28T15:49:00.000-05:00

(Clerk’s Office Schedule for the Holidays)

Tag: Real Estate Attorney

The local Clerk’s Offices will be closed on Friday, December 23 and Monday, December 26 for Christmas. Accordingly, all recordings prior to Christmas need to be completed by Thursday, December 22nd. The Clerk’s Offices, as of now, will be opened the full day on Thursday (No half day Thursday office hours, but this could change for individual Clerk’s Offices.)

For the next week, the Clerk’s Offices will be open from Tuesday, December 27 through all day Friday, December 30. As Saturday is New Year’s Eve and Sunday, New Year’s Day, all of the Clerk’s Offices will be closed Monday, January 2. Although none of the Clerk’s Offices have announced early closings on Friday, December 30, to be safe all recordings should be completed in the morning of December 30.

William D. Tucker, III, Sr. Partner

Tucker Griffin Barnes P.C.

TGBLaw.com | Facebook | Twitter | YouTube

Where Deep Insight Equals Powerful Advantage!

Charlottesville 434-973-7474 | Lake Monticello 434-589-3636

Tip 50-2011: Short Sales & Multiple Contracts

2011-12-28T15:46:00.000-05:00

(Short Sales & Multiple Contracts)

Tag: Real Estate Attorney

The normal practice in the real estate community is that Sellers should sign only one contract to sell their home. Any additional contracts are normally treated as “back up contracts.”

In a short sale situation, this practice is not necessarily true. In other words, the Short Sale Seller can sign multiple contracts (even if they do not state that the subsequent contracts are “back up’s.”) The reason for this is that the Short Sale Lender will only accept one of the contracts for an approved short sale.

As long as each of the executed contracts have a short sale contingency (the VAR Form 600 SS, Short Sale Addendum contains an excellent contingency), then the Seller will not be in breach of contract by signing multiple contracts. The Short Sale Lender will only accept one contract and the other contracts will terminate due to the short sale contingency. In other words, the executed contracts not approved by the Short Sale Lender will terminate due to the failure to obtain Short Sale Lender approval.

Remember in “Short Sales” most of what all real estate professionals have learned and experienced in a normal market are “out the window.” Everything is usually different with short sales.

Please call me at 434-951-0858 if you have questions.

William D. Tucker, III, Sr. Partner

Tucker Griffin Barnes P.C.

TGBLaw.com | Facebook | Twitter | YouTube

Where Deep Insight Equals Powerful Advantage!

Charlottesville 434-973-7474 | Lake Monticello 434-589-3636

Tip 49-2011: Debt Forgiveness Act

2011-12-01T13:35:00.000-05:00

(Debt Forgiveness Act)

Tag: Tucker Griffin Barnes

Most of the federal attempts (HAMP, HAFA, HARP, etc) to deal with the country’s serious real estate problems have been dismal failures. One of the only winners, however, has been the “Debt Forgiveness Act.” This act will continue to be effective through December 31, 2012.

Normally any “debt forgiveness” is taxable as ordinary income. Accordingly, if there is a foreclosure and the property is sold at less than the outstanding debt, then this creates a deficiency which usually becomes taxable income. Likewise, with a short sale, the deficiency created by the short sale is again usually taxable as debt forgiveness. The lender will usually issue a 1099 for the amount charged off.

Under the Debt Forgiveness Act, as long as the property being sold or foreclosed was the residence of the Borrower then the Act applies. Also the debt being forgiven has to be either purchase money, refinance of the purchase money debt or money borrowed to improve the residence. Assuming the debt being forgiven meets these conditions, then there will be no taxable income to the Borrower who has just lost or short sold his house.

PS—Even if the debt being forgiven from a foreclosure or short sale does not qualify as a residence, there are still some exceptions which may result in no taxable income to the Borrower. Please suggest that the Borrower check with their CPA or tax professional.

William D. Tucker, III, Sr. Partner

Tucker Griffin Barnes P.C.

TGBLaw.com | Facebook | Twitter | YouTube

Where Deep Insight Equals Powerful Advantage!

Charlottesville 434-973-7474 | Lake Monticello 434-589-3636

Tip 48-2011: Repost of Classic Turkey Tip

2011-11-22T12:10:00.000-05:00

REPOST OF CLASSIC TIP FROM 2009:

Tag: Tucker Griffin Barnes

Instead of a real estate tip, I thought it would be nice to use this week’s email to wish everyone a Happy Thanksgiving, and provide a few of the memorable calls from the Butterball Turkey Talk-Line:

· A novice turkey-cooking chef wanted to know if the yellow netting and wrapper around the turkey should be removed before roasting. Envisioning a melted plastic turkey blob, the staffer responded, “Yes, unless you like white, dark or plastic,” then offered complete roasting directions.

· White meat, anyone? A young newlywed took turkey preparation to extremes by scrubbing the bird with bleach. Afterward, she called the Talk-line to find out how to clean off the bleach. To her dismay, she was advised to dispose of the turkey and start over!

Have a Happy & Safe Holiday!!

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 47-2011: Trends with Lender Requirements for Refinances

2011-11-22T12:06:00.000-05:00

(Trends with Lender Requirements for Refinances)

Tag: Tucker Griffin Barnes

Although there are streamlined loan programs available for certain refinances, the trend has been increasingly more requirements for refinances. Overall this is not a bad thing, but it does mean extra work for the parties to the refinance. Several of these requirements are completely new and need to be handled upfront to expedite a successful refinance.

One major change is that more lenders are requiring that the title insurance binder be part of the initial loan package (even before the appraisal is completed.) Prior to this change, the title insurance binder was usually provided with the final documents submitted to the loan underwriters. Accordingly the attorney or settlement agent now needs to be engaged earlier in the loan process. As a good practice tip, the Borrower should locate their prior title insurance policy and provide it to the lender and settlement attorney as part of their loan application.

Another trend is that more lenders are requiring well, septic and termite reports for refinances. One loan program that now requires this is the Veterans Administration (VA Loans.) There is nothing wrong with the lenders being more diligent, just be aware of the changes required for refinances.

PS #1 – These changes may extend to purchases as well as refinances.

PS #2 – Whatever the new lender requirements are, they should not prevent anyone from taking advantage of refinancing at these historic low notes!!

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 46-2011: REOs and FANNIE MAE DEEDS

2011-11-14T14:13:00.000-05:00

REOs and FANNIE MAE DEEDS

Tag: Tucker Griffin Barnes P.C.

Fannie Mae is now including in its REO contracts a three month prohibition against conveying one of its REO properties to a new Purchaser. This resale prohibition lasts for three months from the “date of this deed” (usually the closing date), and is limited to a “bona fide purchaser for value.”

This restriction also provides that during the three months limitation the sales price can not exceed 120% of the Fannie Mae sales price. Accordingly a purchaser of a Fannie Mae REO property could resell the property within the three month period if the sales price is less than 120%.

Finally, the restriction prevents the new purchaser from placing a deed of trust on the property for a principal amount greater than 120% of the sales price. Again this restriction is limited to three months from the “date of the deed.”

There has always been “anti-flipping” lender rules. But now Fannie Mae seems to be expanding them to include any resale or refinances of their REO property. Also these restrictions are now being spelled out explicitly in the Fannie Mae Deeds as a restriction that “run with the land.”

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 45-2011: Veteran’s Day & Thanksgiving Holidays

2011-11-14T14:08:00.000-05:00

Veteran’s Day & Thanksgiving Holidays

Tag: Tucker Griffin Barnes P.C.

All local courts will be closed on Friday, November 11, 2011 for Veteran’s Day. Accordingly, any closings should be completed and recorded by Thursday, November 10. Otherwise the recordings can not be completed until Monday, November 13.

During Thanksgiving week, the courts will be closed beginning at noon on Wednesday, November 23, and of course all day Thursday and Friday (Nov 24 & 25.) This means that any closing during the Thanksgiving Holiday week needs to occur on Monday or Tuesday (November 21 & 22), with recordings no later than noon on Wednesday.

Hopefully everyone is enjoying the change of season. Please thank all our Veterans on Friday for their service to our country.

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 44-2011: Short Sales and Bank of America

2011-10-31T11:13:00.000-04:00

(Short Sales and Bank of America) Due to their large volume of delinquent loans, Bank of America has usually been one of the most difficult Short Sale lenders with whom to negotiate. First you had to deal with their required software system – “EQUATOR”. Then Bank of America always seemed to lose the documents submitted, which had to be downloaded again and again. Finally, once a real negotiator was assigned to review the short sale contract, you had to call or email ten times to hopefully receive one reply.

What a difference a few months make!! Bank of America has now become one of the better short sale lenders with whom to negotiate. Equator’s work documents are not lost, in fact you can track exactly what your next task is, and negotiators actually call or email on their own.

Strange but true, we have actually obtained a short sale approval from Bank of America in less than 30 days; from initially downloading the contract to obtaining the short sale approval letter. Although the normal time for a short sale approval is typically two to three months at a minimum, maybe this is a sign of the future. If the time for approval of short sales could be reduced to no more than two months, then more buyers would be available to take advantage of short sale opportunities.

PS – Unfortunately, even with Bank of America as well as most other Lenders, there are still many times when the Short Sale approval drags on way too long.

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 43-2011: Short Sales—Price Negotiations, Part 2

2011-10-19T15:52:00.000-04:00

Last week’s Tucker’s Tip discussed how the initial contract price will usually be changed due to the subsequent negotiations with the Short Sale Lender. All parties to the transaction need to be flexible and willing to renegotiate the contract price and terms based on what the Short Sale Lender will accept.

In a Short Sale, the normal Short Sale Seller should the consider the following goals: (1) Avoiding a Foreclosure, and (2) Avoiding any Deficiency from the unpaid balance of the loan. For the Seller, it is not important “what the original contact price is” as long as these goals are achieved. Remember, the Short Sale Lender will determine for what price they are willing to allow the house to be sold.

Likewise, the normal Short Sale Purchaser usually has a main goal of purchasing the house for as low a price as possible. As long as there is no deficiency for the Seller, the Short Sale Seller should not care what price the Purchaser ultimately pays for the house.

In fact, it is better if the Short Sale Purchaser has not submitted his best offer with the original executed contract. The Short Sale Lender may ask for an additional price increase (based on the “BPO”) and possibly contributions (release of “deficiency”.) Accordingly, as long as the Purchaser still feels he is getting a good deal, the best Short Sale Purchaser is someone who is willing to increase the original price or contribute to the deficiency negotiations.

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 42-2011: Short Sales—Price Negotiations, Part 1

2011-10-19T15:50:00.000-04:00

In the normal real estate transaction, the Purchaser and Seller usually negotiate the contract price, with multiple counter-offers, in order to obtain the highest price the Purchaser will pay. With a short sale, especially if a foreclosure is looming, what is needed is an executed contract with the Purchaser still willing to negotiate should the Short Sale Lender require a higher sales price.

With a short sale, it does not matter what price is initially agreed to in the contract. It is still up to the Short Sale Lender to approve the final contract price. So rather than initially negotiate the highest price the Purchaser will pay, leave some room for further negotiations. With short sales, the original contract price and terms are rarely the final numbers agreed to by the Short Sale Lender.

All of the rules and practices we have learned with real estate contracts and negotiations are usually “moot” when dealing with a short sale. Once the contract is signed and the inspection is complete, all the parties to the transaction (Purchaser, Seller, both Realtors) have one main goal. That goal is convincing the Short Sale Lender to accept the contract price and terms.

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 41-2011: Columbus Day—October 10, 2011

2011-10-19T15:48:00.000-04:00

The banks, courts and all the local Clerk’s Offices will be closed next Monday, October 10, 2011. Accordingly, any closings which have to record by Friday, October 7 should start as early as possible Friday morning, or preferably on Thursday, October 6. If the closing can not be recorded by Friday, October 7, then it will have to wait until Tuesday, October 11.

Please enjoy this last long summerlike weekend. The weather will be great — sunny and in the seventies. The Parade of Homes will be in its second and last weekend. Hopefully everyone will have a safe and fun weekend!

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 40-2011: Short Sales & PBO

2011-10-19T15:46:00.000-04:00

Several prior Tucker’s Tips have discussed the importance of a reasonably valued BPO (Broker Price Opinion.) If the BPO is too high, the short sale lender will not approve the short sale and the house is destined for a foreclosure.

Although the BPO is supposed to represent the current market value of the house, the realtor performing the BPO may determine a value significantly higher than the current contract price. As the BPO normally requires several comps to assist in determining the price, the listing realtor could consider providing listing and comps information to the BPO realtor to support the short sale contract price.

Attached to this Tucker’s Tip is a “BPO Checklist for the Listing Realtor” with information on how to assist with the BPO valuation. Hopefully some of the suggestions will be helpful. Remember, every successful short sale is “one less foreclosure.”

PS: Unfortunately nothing can be done about the “Drive-by BPOs” which are becoming more and more common. It’s unbelievable that a short sale lender will make short sale decisions worth hundreds of thousands of dollars on a valuation which does not include an actual inspection of the property.

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 39-2011: Refinance Stimulus Program

2011-10-19T15:42:00.000-04:00

As reported in many recent media sources, interest rates on real estate loans are at historic lows. According, it is an excellent time to refinance everyone’s personal residence. Unfortunately with the decline in real estate values, some properties are “upside down” or will not appraise at a high enough amount to qualify for a refinance. But as long as the borrower’s credit is good, there are still opportunities to refinance.

There are several loan products available through Fannie Mae or Freddie Mac that allow high loan to value financing. The amount allowed under these programs can be up to 125% of the value of the property. These programs also may qualify for no mortgage insurance (DU Refi Plus). Homeowners may even consider reducing the loan term (for example from 30 years to 15 years.) With the lower rates for a 15 year loan, the new payment may be close to the old 30 year payment, while cutting years off the mortgage. Another possibility is to pay down the principal balance in order to qualify for a reduced loan amount.

The main message with this Tucker’s Tip is to tell “everyone you know” to call our excellent local lenders to discuss their specific situation and the availability of a refinance. A refinance at lower interest rates will usually mean lower monthly payments and more disposable money to help stimulate the economy. Let’s all do our part! Refinance now and Stimulate the Economy!!

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 38-2011: Short Sales and Early Possession – Part 2

2011-09-16T14:09:00.001-04:00

(Short Sales and Early Possession – Part 2) Last week’s Tuckers Tip discussed the possibility of allowing the Buyer of a Short Sale property to “early occupy” the house prior to the approval by the Short Sale lender. The obvious benefit with early possession is to allow the necessary time for short sale approval.

In addition to having a patient buyer, other benefits include the ability to escrow the rental payment to create a “contingency fund.” Since the Seller is not paying the mortgage payments, the rental income can be escrowed and allowed to accumulate. This contingency fund can be used to deal with extra Short Sale lender demands or closing costs the lender will not allow to be paid from the sales proceeds. Another benefit in allowing the Buyer to occupy the house is that someone is now maintaining the property instead of allowing it to deteriorate if it is vacant. Finally, the Buyer, while living in the house, will be further invested in the approval of the short sale. Accordingly, the Buyer may agree in advance or be willing to help participate with additional cash contributions.

Even if the short sale is unsuccessful, and a foreclosure eventually happens, the Buyer will not have to vacate immediately. Foreclosing lenders are required to provide tenants ninety days to vacate and they may even pay moving expenses to the Buyer (now the tenant.) In other words, the Buyer will probably be offered “cash for keys.”

Again, this “Early Possession by Buyer” strategy for short sales is not without risks. It should be carefully reviewed based on the specific circumstances of each particular short sale. But if the facts warrant it and parties understand the risks and benefits, then the “early possession” may be very beneficial for a successful short sale.

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 37-2011: Short Sales and Early Possession – Part 1

2011-09-16T14:07:00.000-04:00

(Short Sales and Early Possession – Part 1) One of the problems with a short sale is convincing the Buyer to be patient with the long period of time required for short sale lender approval. This is especially true if the Buyer needs a place to live prior to obtaining the approval. The average time for approval is usually 3 to 4 months, but unfortunately sometimes it’s extremely longer.

A new strategy to keep the Buyer on board is to allow the Buyer to “early occupy” the short sale house prior to lender approval. Depending on the specific facts regarding the short sale, this strategy may work extremely well in certain circumstances. The VAR “Possession by Purchaser Agreement” (Form 1000A), with necessary modifications, is suited for these situations.

The “early possession” by the Purchaser is not without risk in that the short sale may not be approved and the Purchaser may have to move out. However, many times the rewards of preventing the Buyer from walking due to the long delays with short sale approval will outweigh the risks of non-approval. In fact, once the Short Sale lender has accepted the contract price based on its own BPO, the success rate for a short sale is extremely high if the Buyer continues to be patient.

The next Tucker’s Tip will discuss some of the other benefits of early possession, and why the risks may not be as bad as they may first appear.

Please contact our firm if you have questions or need legal advice.

Tucker Griffin Barnes - Where deep insight equals powerful advantage.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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Tip 36-2011: Issues with "Closing Cost Credit" - Part 2

2011-09-16T14:05:00.000-04:00

(Issues with “Closing Cost Credit” – Part 2) Last week’s “Tucker’s Tip” discussed certain problems as to what will be allowed as a Seller paid “closing cost credit.” Even if the contract language is clear as to what constitutes a closing cost credit, what happens if the closing costs only total “$5,000 and the contract allows $6,000 as a credit? Does the Seller benefit and get to keep the extra $1,000? If the lender allows it perhaps the contract can state that any unused portion of the “closing cost credit” can be applied as a decorating allowance. Other alternatives include increasing the “points” paid to lower the interest rate or reducing the contract price by the amount of the unused closing cost credit. This last solution may create a lender issue by attempting to amend the contract price at the last minute.

Another issue with closing cost credits involves short sale lenders. Some short sale lenders will not allow any Purchaser closing costs to be paid from the sales proceeds. In these cases, the short sale lender will usually allow an amendment to the Contract reducing the contract price by an amount equal to the closing costs credit.

An additional problem that may occur is the short sale lender, in approving the final HUD, wants to review a break-down of the Purchaser’s closing costs. The short sale lender may then decide not to pay a legitimate closing cost, even if it is clear in the contract. Should this occur, everyone needs to remain flexible as usually a solution can be worked out.

PS: If you have any thoughts or comments, please let us know for possible follow ups.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
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Tip 35-2011: Issues with "Closing Cost Credit" - Part 1

2011-08-29T10:11:00.000-04:00

As we all know, Real Estate Lenders are carefully reviewing all aspects of a loan, including the proposed HUD. As a result, problems may occur when the Seller has agreed to pay part of the Purchaser’s closing costs as a “closing cost credit.” The usual “issue” concerns what is allowed as a closing cost credit.

The problem may start with the language used in the contract. For example, the contract states “The Seller agrees to pay $6,000 of the Purchaser’s closings costs.” What happens if prepaids (i.e. escrows, hazard insurance premium or prepaid interest) need to be included as part of the $6,000 in closing costs?

One possible solution would be to verify with the Purchaser’s intended lender as to what closing costs will be allowed to be paid by the Seller. Then be specific in the contract as to what closing costs are intended to be included. For example, “The Seller agrees to pay $6,000 of the Purchaser’s closing costs including, but not limited to origination fees, discount points and prepaids.”

Another problem may occur with an REO Seller as to what they will allow as a Seller paid “closing cost credit.” Even though the Purchaser’s lender will agree to the closing cost credit, the REO Seller will insist that a certain cost is not allowed or cannot exceed a certain amount. Again, the best policy is to attempt to verify ahead of time what will be allowed as a “closing cost credit.”

Next week’s “Tucker’s Tip” will discuss additional problems with this issue.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 34-2011: Short Sales and Loan Applications

2011-08-22T12:08:00.000-04:00

(Short Sales and Loan Applications) Recently several lenders have indicated that they are not allowed to submit the Purchaser’s loan application for approval until there is a “short sale approval letter.” What this means is that after all the time required to obtain short sale approval, only then will the Purchaser’s lender submit the application to their underwriters. If the Purchaser has agreed to apply for the loan after “contract ratification,” then a lender who will not submit the loan application until short sale lender approval may cause the Purchaser to breach the terms of the Contract.

Prior Tucker Tips have discussed the benefits of obtaining loan approval early as a strategy in negotiating with the short sale lender. Basically, with prior loan approval, the short sale lender knows as soon as they issue the approval letter, the closing can occur.

Ask the lender for the Purchaser if there is any policy regarding loan applications for short sale transactions. If they can not submit the loan application until short sale lender approval, then ask for a special exception. Perhaps the lender can obtain conditional loan approval, subject to receipt of the “short sale approval letter.” As there are already enough problems with short sales, it’s best not to have the Purchaser’s lender create a new problem. Everything can usually be worked out if we all communicate and resolve potential problems early.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 33-2011: Labor day Holiday

2011-08-22T12:03:00.000-04:00

(Labor Day Holiday) This year’s Labor Day weekend occurs on September 3-5, with Monday, September 5, as Labor Day.

Hopefully, the end of the month closings for August should not be affected by Labor day. Even if an August 30 or 31 closing is delayed into September, the Clerk’s Offices should all be open until Friday, September 2. If the deed can not be recorded by Friday, September 2, then the recording will have to wait until Tuesday, September 6.

I hope everyone has had a great summer, and is ready for the Fall and new school year. Have a safe and relaxed Labor Day.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 32-2011: Short Sales and VHDA Loans

2011-08-05T15:58:00.001-04:00

(Short Sales and VHDA Loans) Prior Tucker Tips have discussed that short sale negotiations continue to be difficult and still take way too long to obtain an approval. There are a few exceptions to this case - individual private lenders, some credit unions, hard money lenders, and now VHDA.

VHDA is one of the few institutional lenders which will try to complete the short sale negotiations within a sufficient time to meet the contract terms, including a reasonable closing date. VHDA will appoint a negotiator immediately and order an appraisal. The negotiator is usually very responsive and actually returns telephone calls and emails. Possible problems with VHDA negotiations include they are usually very strict on what expenses they allow to be paid our of the sales proceeds and what can be paid to a second lender. Furthermore, they will only pay a maximum of five percent (5%) real estate commission.

All in all, VHDA is an excellent lender to work with on a short sale. Too bad other lenders have not adopted some of VHDA’s attitudes and approaches.

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 31-2011: Warning - Another Internet Scam

2011-08-05T15:54:00.001-04:00

Tucker’s Tip #13-2011 warned about an internet scam where a foreign buyer wants to buy a higher price property for cash (usually sight unseen.) There is a new scam making its way through both the Central Virginia and Valley real estate markets.

This new scam involves a Japanese citizen (“Akira Hibino”) living in Canada who wants to buy a property for cash. He asks the realtor for a list of properties meeting certain criteria, and then selects one to put under contract. He even includes a “questionable” bank statement showing sufficient cash to close.

The alleged buyer then asks the realtor to recommend an attorney to handle the transaction. The buyer also does “not wish to forward my deposit to a third party.” The buyer then contacts the attorney for a “retainer agreement.” Eventually the buyer will ask for wiring instructions for the attorney’s escrow account.

DO NOT WASTE YOUR TIME with this scam! Once again the alleged buyer (scammer) is trying to steal the law firm’s identity. He is not going to be buying any real estate. If it seems too good to be true (a cash buyer for a higher price property without any issues,) it is too good to be true. It’s a scam!!

PS—Just prior to this posting we were sent the name of another scammer from Canada (Shinjyo Naoki). Be careful out there.

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 30-2011: Bankruptcy, Foreclosure & Short Sales

2011-07-22T17:34:00.000-04:00

(Bankruptcy, Foreclosure & Short Sales)

A previous Tucker’s Tip (#2–2011) discussed how a bankruptcy filing will cause problems and delays if the bankrupt seller is trying to sell his house. However, the bankruptcy filing will also stop any foreclosure of the bankrupt’s real estate. Immediately upon the filing of a Chapter 7 (liquidation) or Chapter 13 (wage earners plan), any pending foreclosure is cancelled.

There is an “automatic stay” of the foreclosure until there is either an order to lift the stay, abandon the property, or discharge the bankruptcy. Until this order is entered by the bankruptcy judge, all foreclosures are delayed. These orders can take months to be entered. It depends on how fast the lender acts to request that the stay is lifted, and then, once an order is entered, how soon it begins a new foreclosure proceeding.

In a short sale situation, a bankruptcy filing by the Seller can add additional months to obtain a contract and/or negotiate a successful short sale. In addition, the Seller may be able to continue to occupy the house.

The best advice for a seller contemplating bankruptcy is to consult with a bankruptcy attorney first, and then maybe a real estate attorney. If the seller has already filed a bankruptcy before listing the house, then the seller should consult with the bankruptcy attorney about when he can complete the sale of the property.

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 29-2011: Propane/Fuel Oil Proration

2011-07-22T17:32:00.000-04:00

(Propane/Fuel Oil Proration)

A prior Tucker’s Tip, #21-2009, discussed problems with obtaining a reading from the propane company and the calculation of the amount of the credit as provided in Paragraph 9 of the VAR Contract of Purchase. Paragraph 9 provides that the “Purchaser agrees to pay Seller for all fuel, oil and/or propane remaining in the tank at the prevailing market price as of date of settlement.”

Sometimes the parties to the closing forget about the propane purchase until the last minute, which may cause a problem at the closing table. A good practice is to make sure that everyone involved with the closing is aware that there is propane or fuel oil which needs to be prorated. This information should be provided at the very beginning of the contract negotiations and passed on to all parties, including the settlement attorneys involved in the transactions.

As the measurement of the propane or fuel oil does not occur until just before closing, it is a good idea to keep reminding everyone that the propane bill will be coming. With today’s fuel prices, a full tank can create a very large payment that the Purchasers will have to pay at closing.

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 28-2011: HUD Emergency Homeowners Loan Program

2011-07-07T18:01:00.000-04:00

(HUD Emergency Homeowners Loan Program)

Piedmont Housing Alliance (PHA) has been approved to offer homeowners a brand new federal program, the Emergency Homeowner’s Loan Program (EHLP.) This federal program provides emergency mortgage assistance to homeowners who are involuntary unemployed due to the slow economy, and are at risk of a foreclosure. Eligible homeowners can receive a 0% interest, forgivable loan that will pay past due mortgage payments. The loan may pay up to 24 months of unpaid mortgage, not to exceed $50,000.

This program is only accepting application until July 22, 2011. Accordingly, it is extremely important that if anyone is eligible for this Program, they need to immediately contact PHA (434-817-2436, Ext 105) to determine eligibility.

If you know anyone who is behind in their mortgage payments due to unemployment or medical conditions, please ask them to contact PHA immediately. This Program could help save a homeowner’s home from foreclosure. Although loan modifications, Short Sales and deeds in lieu are alternatives to a foreclosure, the best alternative would be to allow a homeowner to keep their house. PHA contact information:

Piedmont Housing Alliance

434-817-2436, Ext 105

Helpful Link: www.FindEHLP.org

PS—According to an article in today’s (July 7th) USA TODAY, the application deadline may be extended, but as of right now the deadline is still July 22.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
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Tip 27-2011: Septic System Follow UP

2011-07-05T11:22:00.001-04:00

(Septic System Follow UP) A recent Tucker’s Tip #17-2011 (see archive link below) discussed the issue of how the size of the septic system can affect the number of authorized bedrooms and total occupants allowed by the Certificate of Occupancy (CO).

Several realtors offered suggestions on how they handled this potential problem. The first suggestion is why not ask the County or Health Dept to use common sense in that most homes do not really have two occupants per bedrooms. In other words how many four bedroom houses really have eight occupants? Unfortunately, the current regulations are pretty clear. There can only be two occupants per approved bedroom, and good luck fighting “City Hall.”

A second suggestion is that it is possible for a four bedroom house with a three bedroom septic system to receive a special health permit limiting the total occupants to six persons. This solution will occasionally be requested by the original builder. If this occurs, the septic limitation is usually recorded in the appropriate Clerk’s Office.

Probably the best suggestion is to actually go to the Health Dept and obtain copies of the relevant septic information before the house is listed. By having the actual approved permit, there can be no doubt as to the number of approved bedrooms.

Thanks for all the suggestions. Tucker’s Tips appreciates all comments, both good and instructive. Have a Happy and Safe July 4^th.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
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Tip 26-2011: Survey Affidavits

2011-06-23T17:07:00.002-04:00

(Survey Affidavits) One of the issues with each purchase of a home is whether or not the Purchaser needs a physical survey showing all improvements. The lenders do not usually require a survey unless the title insurance company requires it for the lenders title policy. Unless the property is new construction, most title insurance companies will provide lenders title insurance without a physical survey.

Most real estate attorneys believe that a physical survey is very important to protect the Purchaser from such things as fence encroachments, setback issues, etc. At the very least, the Purchaser will know exactly where the house, driveway, etc. are relative to the boundary lines.

Even though a new physical survey is the best protection for the Purchaser, there are many instances where a prior existing physical survey will be sufficient. The current Seller may have had a survey prepared when they bought the property and there have been no changes since. Most title insurance companies will accept a survey affidavit from the Seller that the existing survey is accurate.

Accordingly, it is recommended that the Sales Contract contain a clause that “the Seller will provide any existing physical surveys, and if requested will sign a survey affidavit.” (There have been several instances lately where the Seller will not voluntarily sign a survey affidavit even when an existing survey is accurate.)

PS – It is also recommended that the Sales Contract contain a clause that states “the Seller will provide any prior title insurance policies.” (Tucker’s Tip 39-2010 &13-2009)

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 25-2011: July 4th Holiday

2011-06-16T13:22:00.002-04:00

(July 4th Holiday)

Happy Birthday USA!! All of the Clerk’s Offices and Lenders will be closed Monday, July 4th, 2011. Closings which needs to be completed and recorded before the Holiday weekend should probably start on Thursday, June 30th.

If the closing must wait until Friday, July 1st, make sure it’s scheduled as early as possible. Remember, most Clerk’s Offices stop recording around 4:00 PM Friday.

Have a safe, enjoyable 4th of July!!

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 24-2011: Short Sales Last Minute Issues

2011-06-16T13:20:00.002-04:00

(Short Sales Last Minute Issues)

There are already enough problems with obtaining a successful short sale. Some of the issues are convincing the short sale lender that the contract price is acceptable based on an unrealistic BPO, keeping the purchaser interested during the unreasonable time required to negotiate a short sale and dealing with the actual investor or MI company and their demands for additional contributions.

Now there seems to be a group of new problems which can occur during the actual closing. The Short Sale Approval letter normally requires a final HUD to be reviewed and approved prior to the actual settlement. The short sale lender always reserves the right in their approval letter to change their mind and revise the actual expenses allowed from the sales proceeds.

This final HUD approval can sometimes take 48 hours or more. When the approval comes, the short sale lender could say they are not going to pay the prorated real estate taxes or termite bill, which have been previously allowed. All of a sudden, at the last minute, there is a $350 expense which needs to be paid by the Seller (who unfortunately has no money).

The best advice is for everyone involved with the short sale (both realtors and the Purchaser) to be prepared to assist with these last minute changes. The Purchasers needs to be reminded to be flexible as they may need to contribute some additional money to finalize a successful short sale (and presumably an excellent deal.)

Unfortunately these last minute changes are just part of a short sale and should be anticipated. A short sale without any last minute issues is rare. Remember, we all need to be flexible and understanding as a successful short sale is a benefit for the entire Central Virginia real estate community.

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 23-2011: Reverse Mortgage Purchases

2011-06-16T13:17:00.001-04:00

(Reverse Mortgage Purchases)

Reverse mortgages have over the years received some “bad press.” It’s true they may not be a good product for certain seniors. But there are numerous instances where reverse mortgages make good sense for a particular situation.

A new product, the Reverse Mortgage Purchase, does in certain situations offer a great opportunity for the senior citizen (at least 62 years old) who is buying a new home for their primary residence. Normally the Senior Purchaser would pay a 20% down payment and get an 80% conventional loan with monthly payments for thirty years. With a Reverse Mortgage Purchase, this Senior Purchaser could increase the down payment to qualify for a Reverse Mortgage and never make another monthly mortgage payment.

In one specific example, a Senior Purchaser increased the down payment from 20% to 30% and qualified for a Reverse Mortgage. By paying an additional $20,000 down payment, the Purchaser was able to get a $140,000 Reverse Mortgage to purchase a $200,000 home. Obviously the facts described in the example are illustrative of that particular transaction (appraisal of house, age of borrower, etc), but they are representative of the possible benefits.

Remember, Reverse Mortgages are not for everyone. They are slightly more expensive than a conventional mortgage. Also, at the termination of the Reverse Mortgage (the death of the owner or the vacating of the house for more than a year, ex. moving into a nursing home) the Reverse Mortgage has to be paid if the heirs want to keep the property. If they do not keep the house, there is no liability owed to the bank. But in more and more circumstances, these issues are far outweighed by the advantages. The best advice is to consult with an experienced Reverse Mortgage loan officer to see if this product may benefit the Senior Purchaser.

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
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Tip 22-2011: HOA Disclosure Packet - Continued

2011-06-01T11:52:00.001-04:00

(HOA Disclosure Packet—Continued)

A: Tucker’s Tip #12-2011 discussed the HOA Disclosure Packet and the Virginia Code provisions allowing for the Purchaser to terminate the contract if they are not satisfied with the terms and provisions of the HOA. The Purchaser has three days after “receipt” of the HOA packet to elect to terminate the contract. The question is when does the three days begin to run – upon actual receipt of the HOA packet by the Purchaser, or upon receipt by the Real Estate Agent for the Purchaser?

Unfortunately the three days begins to run upon receipt of the HOA Disclosure Packet by the Real Estate Agent for the Purchaser. Accordingly, know how to locate the Purchaser at all times in order to be able to timely provide the HOA docs to the Purchaser. Lem Marshall has posted a good article on this issue at the VAR website (Summer 2010 – www.varealtor.com).

B: An additional HOA Practice Tip would be to circulate the statement regarding dues and/or other charges (ex: transfer or capital contribution fees) to all necessary parties. In other words, send to the settlement attorneys (Purchaser and Seller) and lender that portion of the HOA Packet which contains financial information required to be prorated or charged at settlement. This will avoid any surprises at the closing table.

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 21-2011: Memorial Day

2011-05-20T11:57:00.000-04:00

Good news! All the Clerks Offices, Banks and Attorney’s Offices will be closed Monday, May 30 for Memorial Day (It’s hard to believe summer is already here.)

Remember all closings which need to occur before Memorial Day should be completed by Friday, May 27. The Clerks Offices stop recording at around 4pm on Friday afternoon. Accordingly, all end of month closings need to happen on Thursday, May 26 or at the latest early in the morning on Friday, May 27. Any closings not completed on Friday can be recorded on Tuesday, May 31.

We all need to work together to make sure that end of May closings are completed as smoothly as possible, with everyone able to move in according to their plans.

Have a Great Memorial Day!

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 20-2011: Short Sales and the MARS Rule

2011-05-20T11:55:00.001-04:00

The FTC has recently issued various rules to protect distressed homeowners from mortgage relief scams. The MARS Rule (Mortgage Assistance Relief Services) imposes a ban on advance fees and false advertising on companies involved in MARS related activities.

The typical scam involves a company claiming they can successfully negotiate with a lender to obtain a loan modification or forbearance plan. The company requires a large advance payment from the homeowner, but then does little or no work to avoid the foreclosure. These abuses now include short sales and deeds in lieu of foreclosure. Thus the need for the MARS Rule to protect the consumer.

As a result, any realtor working with Short Sales must now abide by the MARS Rule. There are two new VAR forms which the realtor needs to provide to the Seller. The first form is called “Mortgage Assistance Relief Services Disclosure Consumer-Specific Disclosure” (VAR Form 400 MARS 1). This form must be signed by the Seller whenever it becomes clear that the realtor will be negotiating with the short sale lender. The second form “Mortgage Assistance Relief Services Disclosure Offer of Mortgage Relief” (VAR Form 400 MARS 2) must be signed by the Seller when approval of the short sale by the lender occurs.

The MARS Rule does not effect attorneys negotiating short sales as long as they are licensed to practice law in the state where the consumer or the dwelling is located, and they comply with the relevant state licensing and bar requirements. Advance fees are allowed for attorneys if these fees are held in their attorney’s trust account.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
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Tip 19-2011: Short Sales and HAFA

2011-05-05T15:10:00.000-04:00

(Short Sales and HAFA) In April, 2010, President Obama proposed his plan to provide uniformity and to shorten the short sale process. This plan was called “Home Affordable Foreclosure Alternatives” (HAFA), and was proposed as an alternative for a failed HAMP (Home Affordable Modification Program). Just as HAMP is a big failure, so has HAFA, until recently.

Several lenders have recently indicated that occasionally a short sale seller may qualify for a HAFA short sale. Even though there have been very few successful HAFA closings, it definitely is a strategy to buy more time for a Seller to obtain a short sale contract. Under HAFA, the lender will pre-approve a sales price for the house, will provide sufficient time to obtain a contract, will pay a full 6% real estate commission, will pay the Seller a relocation allocation, and will agree to no deficiency.

Even if the lender does not allow the streamlined HAFA short sale, they will usually allow a conventional short sale. Hopefully, as more lenders realize that short sales are going to be with us for the foreseeable future, they may embrace HAFA or at the very least streamline some of their short-sale procedures. Only time will tell!

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 18-2011: Short Sales - Closing Deadlines

2011-05-05T15:06:00.000-04:00

(Short Sales – Closing Deadlines) The perfect “Short Sale Buyer” needs patience and cannot usually be in a hurry to close. This unfortunately is not always the case, especially after short sale lender approval. Once the short sale lender has approved the short sale, the short sale lender will normally only allow thirty (30) days for the closing to occur.

In other words, we all hurry and then wait for lender approval, and then when it finally comes there is a short period of time to close. When they finally approve the short sale, they want the Buyer to close within their approved time line. The short sale lender rarely pays any attention to the closing date in the contract. Once you have short sale lender approval, it can be a mistake to ask for an extension of the closing date.

Extensions, however, can be arranged, but there is always a risk. The seller’s financial documents may need to be updated or the lender may need to order a new BPO before they will extend the short sale approval. Even if an extension is granted, it usually includes extra costs (Ex: a per diem interest penalty.)

The best practice is not to take the risk of requesting an extension of the short sale approval. The Buyer needs to be prepared to close with their inspection, loan application and loan commitment already obtained. Then the Buyer is just waiting for the short sale approval.

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 17-2011: Septic Permit, Certificate of Occupancy & Number of Bedrooms

2011-04-25T11:15:00.002-04:00

(Septic Permit, Certificate of Occupancy and Number of Bedrooms) When a septic permit for a new house is issued by the local Health Department, it specifies the number of bedrooms approved for the septic system. This information is also given to the local governmental office issuing the Certificate of Occupancy (CO). Sometimes even the CO states the number of authorized bedrooms.

The local jurisdiction will normally allow for maximum occupancy of two persons for each approved bedroom. For example, a three bedroom house can be occupied by no more than six persons.

What happens if the fourth bedroom is listed as a “study” in a three bedroom approved house? The initial homeowner should check the building permit, septic permit and/or CO to verify the number of approved bedrooms and maximum number of persons who can occupy the house.

But then what happens, if on resale, everyone forgets that the fourth bedroom is really a study or the homeowner has added a bedroom and bath in the basement without increasing the septic field? Unfortunately no one usually checks the old CO or septic permit (assuming one is available) to verify the number of approved bedrooms.

There is no easy solution to these problems. The best solution is to avoid the problem all together. Builders should build the correct sized septic system based on the actual number of bedrooms. Realtors, Purchasers and Settlement Agents could exchange information on the number of bedrooms in the new house, and the number of bedrooms approved for the septic permit and CO. Homeowners should not finish the basement and add a guest bedroom without, if required, increasing the size of the septic field. The main point of this Tip is just to be aware of the problem.

Please contact our firm if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
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Tip 16-2011: Short Sales, Listings, Realtors & BPOs

2011-04-25T11:09:00.002-04:00

(Short Sales, Listings, Realtors and BPOs) Listing Realtors in a “short Sale” take on tremendous responsibility and extra work. One of the most important jobs they can perform for a successful short sale is to actively participate in the BPO (Broker Price Opinion). Once there is a fully ratified contract (executed between Buyer and Seller and waiting for short sale lender approval), the realtor should remove the lock box from the house.

By removing the lock box, the realtor or appraiser performing the BPO has to make arrangements to meet the Listing Realtor at the house in order to obtain access for the BPO. At the BPO appointment bring the BPO realtor or appraiser documentation to support the short sale contract price. Relevant comps, current similar listings, marketing history, days on the market, price reductions and number of showings are all information which supports the contract price. If the Buyer’s inspection revealed serious problems, provide a list of the deficiencies or repair items. Finally, a copy of the ratified contract can be extremely important. Have copies of everything available to give to the BPO realtor or appraiser.

The goal is to make the PBO realtor or appraiser’s job easier and by doing so, provide supporting documentation for the current contract price. This is one of the most important opportunities the Listing Realtor has to affect the success of the short sale.

Be proactive and participate in the BPO. Remember, an unrealistically high BPO is usually a death sentence for a short sale.

Please contact our firm if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 15-2011: Boiler Plate Deeds

2011-04-07T17:15:00.001-04:00

(Boiler Plate Deeds) Ron Critzer at Court Square Title was kind enough to share the following story! He recently encountered two situations where multiple property owners decided to change title among each other. Instead of retaining an attorney to be sure the deed was drafted properly, these owners attempted to save money and obtained an on-line deed template or something similar from Staples. These “boiler plate” deeds can sometimes create significantly more problems and costs than what is saved.

In Ron’s two situations, the boiler plate deeds contained a reservation of mineral and subsurface rights by the Grantors. In other words, the transferring (selling) owner still owns part of the real estate. Now when the current owners want to sell you still have to track down the prior owners to get the mineral rights released. What a mess!

In Ron’s words, “If you’re going to convey an interest in real estate, make sure an attorney prepares the deed.”

PS – I couldn’t have said it better.

Please contact us if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 14-2011: Short Sales (Locking in Interest Rates)

2011-04-07T17:12:00.002-04:00

(SHORT SALES – Locking In Interest Rate) A previous Tucker’s Tip #4-2011 discussed what constitutes a qualified short sale Buyer. First, the Buyer needs patience to allow sufficient time for the short sale lender to approve the contract. Second, the Buyer may need to provide additional cash to contribute to any subsequent lender, investors and mortgage insurance requirements for short sale approval.

As a result of the time usually required for short sale approval, the Buyer should consider delaying as long as possible locking in the interest rate with their lender. There is unfortunately no guarantee how long a short sale may take for lender approval. A possible strategy described in Tucker’s Tip #9-2011 suggested first satisfying the inspection contingency, and then once satisfied, the Buyer can apply for the loan. Both of these contingencies should be completed after “contract ratification”, not after “lien holder approval”. By using this plan, the loan application is not submitted until approximately thirty days after contract ratification, thereby allowing a longer opportunity to lock in the interest rate.

As there is no guarantee how long a short sale approval will take, delaying locking in the buyer’s interest rate will usually save the Buyer from paying potential “lock extension fees”. Obviously, there are certain instances when the Buyer may decide that “locking in” early is their best strategy. In these cases, if possible, try to negotiate as long a loan lock period as possible.

PS – The City of Charlottesville Clerk’s Office will be CLOSED April 13^th for Thomas Jefferson’s Birthday.

Please contact us if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 13-2011: Agents Beware -- Local Real Estate Scam

2011-03-29T09:45:00.001-04:00

There is a real estate scam making its way through various local real estate agencies. A foreign buyer (“Masakazu Ichiro” or some other variation of that name) wants to buy a higher priced property for cash (usually sight unseen). He contacts a local Realtor for a list of suitable properties and will then eventually contract to buy one of the properties.

The scam then continues as he does not want to wire the deposit money to the Realtor’s account, but instead wants to use a third party to hold the deposit. The alleged buyer then asks for a recommendation of an attorney to handle the closing and also be the third party holder of the deposit. Finally, the buyer wants wiring instructions so he can wire the deposit to the third party’s (attorneys) escrow account.

Do not fall for this scam! Do not waste your time dealing with this “person”. The alleged buyer only wants information regarding the escrow account. He does not intend to buy a house, he’s just trying to steal the law firm’s identity, which according to the bank he can then use to create bogus checks. Once again, if it seems to good to be true (a high end cash buyer who does not need to see the property), it is. Be careful out there!

Please contact us if you have questions or need legal advice.

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William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
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Tip 12-2011: HOA's & Dosclosure Packets

2011-03-29T09:41:00.001-04:00

The current VAR Contract provides that the HOA Disclosure Packet needs to be delivered to the Purchasers prior to the settlement. Virginia Code Section §55.509.04 states that the Purchaser has three days after receipt of the actual disclosure packet to review the documents. Within the three days, the Purchaser can decide if they want to terminate the contract due to the information contained in the HOA Packet. No reason needs to be given and no questions can be asked, the Purchaser can simply terminate the contract.

As a result of this giant “get out of jail free card”, it is advisable for the listing Realtor and/or Seller to provide the HOA Packet very early after contract ratification. Do not wait until after the Purchasers obtain their loan commitment. At the least, provide the HOA packet immediately after any inspection contingency is satisfied. (Even if the transaction is a Short Sale, do not wait until Short Sale lender ratification – provide the packet early.)

Not only provide the HOA documents early, but be sure it is a complete packet provided from the HOA with current financial information. It is not enough to simply send the covenants and restrictions. The required packet should contain the items listed in VA Code §55.509.5, including a statement of all assessments and any other mandatory fees or charges currently imposed by the Association.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 11-2011: Short Sales and Listing Price

2011-03-29T09:39:00.001-04:00

The listing price, as agreed to between the realtor and the seller, reflects what they believe is the current market value. This listing price in our current climate should not be too high or there is no activity. This can especially be harmful for short sales when a foreclosure is pending.

With a short sale, the listing price is extremely important. The listing price needs to be part of an overall short sale strategy. One important factor is how delinquent the seller is with their loan payments. Another factor is whether a foreclosure is pending. Finally, the short sale lender may not want the initial listing price to be too low.

One thing to remember is that a contract at a “full price” offer does not necessarily mean a successful short sale. Unfortunately, the short sale lender will obtain their own opinion as to the value of the property. This opinion will be in the form of either an appraisal or a BPO (broker price opinion).

If the lender’s BPO is significantly higher than the contract price, then the short sale will probably not be approved. Should an unrealistic BPO cause such a problem, there are methods of challenging the value, but it is an uphill battle.

There are some short sale lenders, which if given enough advance notice, will predetermine what listing price they will approve. FHA and some lenders which claim they allow a HAFA (Home Affordable Foreclosure Alternative) Short Sale may pre-approve a listing price.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 10-2011: Home Owner's Association (Copy of HUD-1)

2011-03-29T09:36:00.001-04:00

There is no uniform procedure for how a Home Owner’s Association (HOA) is to be given information about a new homeowner. Each HOA has its own way to receive the name of the new purchaser. The HOA Disclosure Packet will usually contain an address and contact information about the HOA and the documents required. This is usually given directly to the Purchaser.

There is a recent trend where the HOAs’ require a copy of the Purchaser’s HUD-1 to change the information in their system. If the HUD-1 is a requirement of the HOA, be sure to inform the settlement attorney. It is also important that the Purchaser’s Settlement Attorney have the HOA’s address and/or email contact information. (Normally, the listing realtor obtains the HOA information, including addresses and contact information, and gives it to the selling realtor.)

It is recommended; however, that the complete HUD-1 not be provided to the HOA as it contains financial information which the HOA does not need. At the very most, only provide Page 1 of the HUD which contains the names and addresses of the Seller and Purchaser along with the Settlement Date. Other financial information on Page 1 of the HUD maybe helpful to the HOA, such as purchase price, proration’s, etc., but may not be required. The best advice is however not to send the HUD-1, but instead provide the HOA with a copy of signed Deed, which contains the minimum information necessary for the HOA.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 9-2011: Short Sales: Inspection & Loan Application

2011-03-04T17:14:00.001-05:00

The VAR Short Sale Addendum allows the Purchaser to choose when to perform the property inspection, and when to apply for the loan. The Purchaser can choose to satisfy these contingencies at either contract ratification or after short sale lender approval.

To have a better chance of a successful short sale, these two contingencies should be removed by the time the short sale negotiator gets involved. Otherwise, the parties can go through the lengthy short sale approval process only to have the Purchaser terminate the transaction due to an inspection or loan issue.

One strategy, to prevent additional cost for the Purchaser, is to modify the contract to provide that the inspection occurs first, usually within several weeks of the contract ratification. Then after the inspection contingency has been satisfied, the Purchaser can apply for the loan (a month or more after the ratification). This strategy will also allow for a longer time for the interest rate lock until short sale approval.

Other advantages with this strategy are: (1) the Purchaser is more invested in the short sale process after spending money for the inspection and appraisal; (2) there is an inspection available to help convince the lender to approve the short sale (assuming there are significant unrepaired items); and (3) the short sale seller has an actual appraisal to contest the short sale price if the short sale lender obtains an unreasonably high BPO.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 8-2011: Working Together (Part Two)

2011-03-01T11:19:00.001-05:00

Last week’s Tip discussed the general stress involved with real estate closings, and suggested that instead of blaming someone, let’s work together to solve any problems. In other words—working together to create a solution is better than pointing fingers. We all want a successful closing.

This week’s observation is to promote communication between all the parties involved in the closing (client, realtor, lender, settlement attorney, etc). In order to help eliminate the stress and last minute problems with a closing, let’s attempt to better communicate between all the parties involved.

This starts with advising our clients (buyers and sellers) of the potential problems and difficulties they may face in the closing. Let them know that if one of these problems occur, all the parties in the transaction will be working and communicating together to fix the problem. As soon as a problem occurs, we all need to immediately begin to discuss creating a solution, not who caused the problem.

All in all, I’m proud of our real estate community, and the professionals involved with it. By continuing to “work together”, not blaming anyone and communicating to resolve any problem, we can help insure that each and every closing is successful.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 7-2011: Working Together (Part One)

2011-02-17T15:53:00.001-05:00

Normally, the weekly Tucker’s Tip discusses a specific real estate issue, and ideas of how to deal with it. Sometimes, however, it is simply a good idea to discuss the general real estate climate and related problems without any specific issues or advice.

Currently, there is a tremendous amount of stress in the real estate market place. Foreclosures and short sales depress the values in a neighborhood. Lenders need complete and accurate documentation in order to satisfy the underwriters. There are limited buyers, and excess inventories. Then there are the normal closing issues which cause additional delays and stress in an already stressful situation.

With all of these factors causing uncertainty, complexities and stress with the normal closing, I would like to offer the first of two observations:

It does not help to blame anyone for any problems. As a settlement attorney, almost all of the problems with a closing manifest themselves in the final act—the actual settlement. If there have been problems from any of the prior parts of the closing (loan, inspection, title issues, etc), the settlement is when they have to be resolved.

Rather than blame someone, let us all work together to resolve any last minute problems, and any unresolved prior problems. We are all in this together (realtor, lender, attorney, title company, etc) and we need to continue to work with each other in the future. By working together, we can solve these problems and create a successful closing for our clients.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 6-2011: No Recording on President's Day

2011-02-11T10:54:00.001-05:00

(President’s Day—February 21, 2011):

All local Clerk’s Offices and Banks will be closed on Monday, February 21, 2011 for President’s Day. In addition, many other offices (attorneys, surveyors and title companies) will also be closed for this National Holiday.

For closings, this means that if you have to record the deed before the buyer can occupy, try to schedule the closing for Thursday, February 17, or as a last resort early on Friday, February 18. If the deed is not recorded by Friday afternoon, the buyer may have to wait until Tuesday to occupy.

Possible Alternative Strategy: Arrange for the Buyer to get his keys once the Buyer has signed all his loan documents and delivered his money to the closing attorney.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 5-2011: REO Addendum & Inspection Clause

2011-02-04T14:35:00.001-05:00

The REO addendum (provided by the REO Selling Bank, which supersedes any terms in the standard VAR Contract) usually allows for an “Inspection” by the Buyer. The “Inspection” clause may allow the Buyer to terminate the Contract if the Buyer is not happy with the inspection results.

In performing the inspection, there are several matters to be concerned about. First, there is usually a quick deadline for performing both the inspection and reporting the results and/or terminating the contract. This deadline is usually “ten” calendar days, which starts from the date of contract ratification.

Another problem is with the well, septic and termite inspections (which the REO will not provide). The well, septic and termite inspections may be included under the REO inspection clause, which means these reports may need to be performed within the “ten” calendar day requirement for inspections. This is completely contrary to the normal practice of performing these inspections within the last week before closing.

The basic advice is to read the REO Addendum carefully, especially regarding any inspection terms and deadlines. It’s my experience that most REO Sellers maybe flexible with some of these deadlines through the use of subsequent addendums. Just be cautious!!

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 4-2011: Short Sales - Qualified Buyers?

2011-01-28T10:02:00.001-05:00

We all know how to be sure a prospective buyer is a “Qualified Buyer.” (cash to close, a high credit score, sufficient income, etc.) Additionally, the house has to be “qualified” (satisfy any appraisal and inspection requirements.)

The “Qualified Buyer” for a short sale property needs two additional “qualifications.” The first qualification is patience to allow sufficient time for the short sale lender to approve the short sale. This “Qualified Buyer” can not plan to close within 60 days. Although some short sale approvals now take less time, still the average approval is between three to five months.

The second qualification is less obvious. The buyers of a short sale property should expect that they may be asked to contribute additional funds to obtain the approval. Sometimes the investor, the second lender and/or the mortgage insurance company may ask for additional contributions in order to approve the short sale. The Seller may not be able to come up with cash as they are in financial distress and raising the contract price may not be an option.

Thus, the “qualified” short sale buyer may need to assist in providing these additional contributions for approval of the short sale. In other words, the short sale buyer should still have some “cash in the bank” in case the negotiations may need a little “extra” from someone to obtain the short sale approval.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 3-2011: Short Sales: When Is Contract Considered Ratified?

2011-01-25T16:57:00.001-05:00

There appears to be some confusion about when a Short-Sale Contract with an attached VAR Short Sale Addendum is considered to be ratified. The Contract is legally ratified once both the Purchaser and Seller sign the same Contract, Short-Sale Addendum, all other Addendum's, and all changes initialed.

The fact that the Seller’s “Short Sale Lender” still has to approve the Short Sale does not mean that the Contract is not ratified between the Purchaser and Seller. The required “Short Sale Lender” approval is a “contingency” that if not satisfied will result in the contract being terminated just like any other unsatisfied contingency .

The Purchaser will usually first satisfy the normal contingencies (the inspection and loan commitment) and the HOA package will be reviewed and accepted. Then everyone will wait for the biggest contingency—the approval by the Short Sale Lender of the short sale terms. While all these contingencies are waiting to be satisfied, the Contract has still been “ratified.”

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 2-2011: Real Estate Sales & Bankruptcy

2011-01-13T14:00:00.002-05:00

With the problems in the economy, there are more bankruptcy filings than ever before. Whenever there is a Seller who is in a bankruptcy proceeding (Chapter 7—Liquidation or Chapter 13—Wage Earner’s Plan) there could be additional difficulties with the transactions.

Before the sale can be completed, the Seller has to obtain bankruptcy court approval for the sale. Such approval could include a bankruptcy court order abandoning the property and/or lifting the bankruptcy automatic stay. Also depending on the type of bankruptcy, the actual sale may need bankruptcy court approval.

Practice Tip: As part of the listing appointment, the Realtor should ask if the Seller is in any bankruptcy proceedings.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 1-2011: More Holidays (Charlottesville Attorney)

2011-01-05T17:57:00.000-05:00

After all the recent holidays, there are two more. All of the Clerks Offices will be CLOSED Friday, January 14th for Lee-Jackson Day and Monday, January 17th for Martin Luther King (MLK) Day. This will obviously effect closings and recordings for the next week.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 49-2010: Final Week

2010-12-30T16:12:00.000-05:00

Remember that this is a short week for all recordings and real estate transactions. All the Clerk’s Offices will be closed on Friday, December 31, 2010. Have a Happy and Safe New Years! Drive Safely!

You may want to consider attending First Night Virginia’s 29th celebration on New Year’s Eve. The weather is going to be great and the prices are cheaper this year. First Night Virginia is a wonderful family event, with excellent entertainment, and needs all of our support.

PS—The real estate department at TGB has moved from its lower floor location to the top floor of our building. We love our new real estate area as our closing/conference rooms are bigger and we have more windows.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
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Tip 48-2010: Short Sales & Mortgage Insurance

2010-12-16T13:30:00.000-05:00

A recent trend with short sales is that the Seller’s mortgage insurance company may become part of the negotiations (The Seller may not even know they have mortgage insurance.) As part of the short sale approval, the MI Company may demand a promissory note and/or a cash contribution in order to approve the short sale.

The good news for the Seller is that this contribution should result in the short sale lender and MI company agreeing to waive any deficiency. The bad news is that someone has to pay the additional contribution.

If the Seller does not have the available funds for the contribution, then in order to obtain the approval, either the Purchaser and/or the realtors have to provide the additional contribution.

Each short sale is different, so this may not always be the case. Nevertheless, it’s best to alert both the Seller and Buyer in a short sale transaction that the contract terms and cash required to close may need to change as the short sale negotiations proceed to an approval.

Please contact us if you have questions or need legal advice.

Senior Partner

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, Virginia
434-973-7474
Tucker@TGBLaw.com
www.TGBLaw.com

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